Simon Murray, Principal Analyst at Digital TV Research, said: “Despite losing TV subscribers, UPC/Liberty Global will remain Europe’s largest pay TV operation by some distance. Germany’s Unitymedia will lead the way for Liberty Global.”
Murray continued: “UPC/Liberty Global will not be the only operator to experience falling TV subscriber numbers between 2011 and 2017. In fact, this will happen for 31 of the 95 operators covered in this report – or a third of the total. Subscriber numbers will fall for various reasons, the most common of which is increased competition. Traditional pay TV operators now face greater rivalry than ever before – either from other pay TV platforms such as IPTV or satellite or from “free” multichannel TV services such as DTT and online TV and video.”
Declining subscriber numbers will affect cable operators more than other operators. Many of these established players have the legacy of a large analog subscriber base. Although most of these homes are expected to convert to digital packages from the same operator, some will be tempted to migrate to other platforms. This is especially true of the ‘refusniks’, who do not want to pay any more for TV services and may be most attracted to free-to-air DTT.
BSkyB (available in the UK and Ireland) will drop from second to third in the subscriber ranking, although its subscriber count will increase between 2011 and 2017.
Russia’s Tricolor will move up from fourth in 2011 to second place in 2017 by adding nearly 5 million subscribers. The low-cost DTH player also has many “subscribers”, which do not pay to receive the service and have therefore not been included in this report.
Total subscription and VoD revenues for the 95 operators increased from $26.0 billion in 2007 to $33.7 billion in 2011. However, the total will only reach $35.4 billion by 2017.
Subscription and VoD revenues will fall for 35 of the 95 operators (37 per cent) covered in this report between 2011 and 2017. These revenues are for subscriptions and VoD only, and therefore do not include other revenues such as broadband, telephony, advertising, equipment sales and rental, etc.
These revenues will fall (or at least slow in growth) for numerous reasons, including greater competition, which will see operators reduce package prices (and often the number of channels on offer) to retain existing subscribers and/or attract new subscribers. Another major factor is the operators’ drive to convert their subscribers to triple-play and double-play bundles, which are more lucrative to them overall than standalone TV subs but mean lower TV ARPUs (average revenue per user).
BSkyB will remain at the top of the revenues’ league, recording $7.2 billion subscription and VoD revenues by 2017. UPC will stay in second place and will remain someway behind.
The European Pay TV Operator Forecasts report is available from Digital TV Research.